August/September, 2011

With the start of a new academic year, many among us spend August preparing to send children back to school or off to college. Most people – and certainly the vast majority of parents – are well aware that "back to school" doesn't just mean the end of summer and a quieter house. It often carries with it a hefty price tag, particularly when it comes to tuition and student loans.

Costs Affecting Career Choices

The high costs of education don't stop at graduation from college. Just ask any one of our medical students. But it's not just the students and their families who should be concerned about this issue. Indeed, there is growing awareness that the high cost of medical education may be contributing to physician shortages, particularly in primary care. Financial pressures and the need to pay off huge amounts of student loan debt can drive new medical graduates to choose higher-paying specialties over primary care. The daunting prospect of taking on significant debt may be deterring some bright and talented young people from pursuing careers in medicine altogether.

Evidence is mounting that the cost of medical education and the burden of student loan debt are influencing recent medical graduates’ choice of residency programs and specialty. From 1997 to 2005, there was a 50% drop in the number of U.S. medical graduates entering family medicine residencies. While a significant percentage of new M.D.’s enter residency programs in internal medicine, relatively few of them are choosing careers in general internal medicine, with the majority opting for sub-specialty training and careers as specialists in fields that, for the most part, offer higher salaries. In 1998, more than half of third-year internal medicine residents – 54% – planned to practice general internal medicine; by 2007, that figure had dropped to 23%. A 2007 survey of fourth-year medical students revealed that only 2% of them planned to pursue careers in general internal medicine, suggesting that shortages of primary care physicians will continue to worsen.

Certainly there are many other considerations besides future earning potential that shape individual choices about career paths, but financial pressures resulting from high levels of student debt are a significant factor, according to studies published by the Association of American Medical Colleges (AAMC), the New England Journal of Medicine, and elsewhere. This is of particular concern to me because for a number of years now, the debt levels of Penn State College of Medicine medical graduates have been higher than the national average. For the graduating class of 2010, the most recent class for which national comparison data is also available, the mean debt at graduation for our graduates was $183,509, significantly higher than the national average of $157,944. Since many graduates defer payments on student loans during their residency training, these amounts continue to increase over time as interest accrues. To understand how the problem of debt is growing for Penn State College of Medicine graduates, consider this statistic: of our 2002 graduates, only 2% had debt of over $175,000 at graduation; by 2010, 69% of our graduating class owed more than $175,000 in student loans. Those figures are purely for medical school loans, so they do not include debt that students may have incurred during their undergraduate years.

As an institution with a strong history and tradition of training primary care physicians, we need to look closely at whether the financial burdens our graduates face are steering them away from primary care fields they might otherwise pursue. We should also be concerned about the impact on the socioeconomic diversity of our students and of physicians nationwide. In 1971, nearly one-third of medical students came from households with incomes in the lowest 40th percentile; today, only 10% do, and increasingly medical students come from affluent backgrounds. We must redouble our efforts to increase support for scholarships and financial aid, so that outstanding students – regardless of their background and financial means – can pursue medical careers and choose specialties based on their talents and interests, rather than primarily on the basis of earning potential and the need to pay off overwhelming amounts of debt.

Funding Support for Medical Education

As is the case throughout much of higher education, our tuition, though it has risen at a rate higher than general inflation, does not cover the full cost of educating our medical students. Our current annual cost of educating a medical student is estimated at $72,000, significantly more than annual tuition (currently, $39,528 for PA residents and $49,984 for non-residents). As we look to find ways to control tuition costs for our students, we must also seek ways to increase funding support for medical education, through private philanthropy as well as state and federal funding. Whether through new sources of funding or innovative educational models, we need to find ways to close the gap between tuition and the cost of education without placing additional financial burdens on our students. We will also continue our efforts to provide our students with the information, advice and support they need to make smart financial decisions and navigate the financial aid process. Other solutions – such as increasing the availability of debt forgiveness programs that allow students to eliminate some debt in exchange for public or military service – also have a role to play in keeping medical education accessible and promoting service in primary care and underserved communities.

Financial aid for students is a priority not only for Penn State College of Medicine but for the University as a whole, and I am pleased to report that our efforts to raise more funds for student scholarships at the College of Medicine have been very successful. Since January 2007, we have received $4.2 million in new commitments and estate gifts for this purpose, and I am confident that we will reach our goal of raising $5 million for medical student scholarships by the end of June 2014.

In addition to our efforts to address the costs of medical education, we are also responding to projected health care provider shortages in other ways. We are in the process of establishing a new Physician Assistant master’s degree program and have also introduced new training programs in advanced practice nursing. While increasing the workforce of physician assistants and nurse practitioners will not completely make up for the growing shortfall in the number of physicians, it will help close some of the gap between supply and demand, making it easier for people to get access to the health care they need.

Ultimately, the real issue is one of increasing access: for aspiring physicians, access to medical education with the resources to make such an education and career affordable for those with the talent, ability, and determination to pursue a career in medicine, regardless of their background or financial means; for patients, access to quality health care by well-trained providers from diverse backgrounds who are pursuing their passion, not just the specialty that they feel compelled to pursue for financial reasons. Accomplishing these goals will take creativity and commitment on the part of many people and institutions, but the future of health care depends on finding ways to address the related issues of the cost – to society, to medical schools, and to medical students and their families – of training new doctors and maintaining a physician workforce adequate to meeting our nation’s health care needs.

Harold L. Paz, M.D.
Chief Executive Officer, Penn State Hershey Medical Center
Senior Vice President for Health Affairs, Penn State
Dean, Penn State College of Medicine